Ineligibility of principal and surety; loss of program eligibility.

(A) A principal is ineligible for a development services agency bond guarantee under one or more of the following circumstances; (1) An owner, officer, director, or general partner of the principal is under indictment for, or has been convicted of a felony involving protecting the integrity of business transactions or business relationships; or a final civil judgment has been entered stating that such owner, officer, director, or general partner has committed a breach of trust or has violated a law or regulation protecting the integrity of business transactions or business relationships; or (2) A regulatory authority has revoked, canceled, or suspended a license of the principal, or an owner, officer, director, or general partner of the principal, which is necessary to perform the contract; or (3) The principal has obtained a bond guaranteed by fraud or material misrepresentation. (B) A surety is ineligible for a development services agency bond guarantee under one or more of the following circumstances: (1) A regulatory authority has revoked, canceled, or suspended a license of the surety, or an owner, officer, director, or general partner of the surety, which is necessary to transact business as a surety insurer; or (2) The surety has obtained a bond guarantee by fraud or material misrepresentation; or (3) The surety has materially breached the EDGE bond guarantee participation agreement with the development services agency. (C) A principal may lose eligibility for further development services agency bond guarantees if any of the following occurs under a development services agency-guaranteed bond issued on behalf of the principal: (1) Legal action under the guaranteed bond has been initiated; (2) The obligee has declared the principal to be in default under the contract; (3) The surety has requested reimbursement for losses incurred under the bond; or (4) The principal committed fraud or material misrepresentation in obtaining the guaranteed bond. (D) A surety may lose eligibility for further development services agency bond guarantees if any of the following occurs under a development services agency-guaranteed bond issued on behalf of the principal: (1) The surety committed fraud or material misrepresentation in obtaining the guaranteed bond. (2) The surety has materially breached the EDGE bond guarantee participation agreement. Effective: April 7, 2014 Promulgated Under: 119.03 Supplemental Information Authorized By: 122.90 (B) Amplifies: 122.90 Five Year Review Date: 1/4/2024